pension scheme company Cash injection £300,000 Tax free annual rent £21,000 MANUFACTURING BROS pension schemes company Cash injection £300,000 Tax free annual rent £21,000 MANUFACTURING BROS If you are a business owner with a company that owns its own trading premises, then this property can be sold to your pension scheme.Your company can then benefit from a valuable cash injection into the business. Alternatively, if you are a business owner that does not own the property that you trade from, you may not realise that you may have the means to acquire the premises by using your pension fund. Imagine the advantages of being the property owner rather than the tenant. No longer bound by uncertainty of lease renewal and landlord constraints.You could enjoy complete freedom and security of property ownership with all the rent going to your own pension fund instead of to a landlord. In both instances you continue trading from your premises and pay rent direct to your own pension scheme. Not only that, but your property has complete security as it will generally be protected from any future creditors. How to: You will need to set up a SSAS or a SIPP (a relatively simple process) and transfer in your existing pension benefits. Either of these can then be used to fund the property purchase. Alternatively, if your business owns the property, ownership can also be transferred into the pension scheme as an in specie pension contribution (this is a fancy name for a pension contribution that is an asset rather than cash). This not only increases the value of your pension fund, but also allows generous corporation tax relief for the business. COMMERCIAL PROPERTY OWNERSHIP IN YOUR BUSINESS EXAMPLE 1 Geoff and his brother Steve have a business which manufactures machinery parts. The business owns the factory and the premises have recently been valued at £300,000. The brothers’pension schemes have a value of £180,000 each. These are put together into a joint SIPP or SSAS and the pension scheme buys the property from the business with the remaining pension fund invested. The company now pays the pension scheme a market rent of £21,000pa for the use of the factory. The business has received a cash injection of £300,000 and the pension scheme receives a tax free annual rent of £21,000. VISIT www.morgan-lloyd.co.uk EMAIL tom.whitlock@morgan-lloyd.co.uk TEL 01275 813726 4 5